DETROIT, Michigan: U.S. new-vehicle sales edged up only slightly in the second quarter despite more significant discounts and marginally lower prices.
Preliminary figures from Motorintelligence.com show overall U.S. sales were up just 0.1 percent year-over-year, as high prices continued to deter many potential buyers. Sales were also affected in late June when cyberattacks disrupted dealership software, delaying some deliveries into the third quarter.
Auto industry analysts expect prices to drop further, potentially boosted by interest-rate cuts that would make auto loans more affordable. Inventory on dealer lots is building, especially for higher-priced vehicles like pickup trucks, while smaller, less-expensive models and hybrids remain in shorter supply.
"Waiting may be the optimal strategy here," said Cox Automotive Senior Economist Charlie Chesbrough, noting that many customers are delaying purchases in anticipation of bigger discounts.
Automakers reported selling approximately 4.13 million new vehicles from April through June, on pace to reach forecasts of nearly 16 million for the year, slightly above last year's 15.6 million.
Sales performance varied among automakers:
Toyota: Up 9.2 percent, driven by popular gas-electric hybrids.
Honda: Up 2.7 percent.
General Motors: Up 0.3 percent.
Hyundai: Up 1.8 percent.
Subaru: Up 5.4 percent.
Stellantis: Down 20.7 percent, with Ram brand off 26 percent and Jeep down 19 percent.
Nissan: Down 3.1 percent.
Kia: Down 1.6 percent.
Ivan Drury, director of insights at Edmunds.com, highlighted that interest rates for new vehicles are averaging just above 7 percent, high for many looking to replace their cars. Lower-priced vehicles, like the Chevrolet Trax compact SUV, which starts at $20,400, saw significant sales increases, up 152.7 percent in the quarter.
Kevin Roberts, director of analytics for CarGurus, noted a growing demand for affordable vehicles under $30,000. He suggested that automakers may need to increase discounts or shift production focus to meet this demand, though this could hurt Detroit automakers who previously exited the lower-priced sedan market.
The auto industry has faced challenges since the pandemic began in early 2020, with a shortage of vital computer chips hobbling production and driving prices up. This year, however, improved chip supplies have boosted production and increased inventory. As a result, average selling prices dropped 1 percent to about $48,400 last month, though still 20% higher than pre-pandemic levels.
Electric vehicle (EV) sales rose 7 percent in the year's first half to 599,134, making up 7.6 percent of the new vehicle market. Sales of gas-electric hybrids surged 35.3 percent to 715,768, surpassing EV sales, while plug-in hybrid sales increased 24 percent to 159,399.
Tesla reported a 4.8 percent decline in global sales for the second quarter, with a 6.6 percent decline in the year's first half.